CP tries to throw another wrench in CN’s merger plans

CALGARY — Canadian Pacific Railway has filed an application with the U.S. Surface Transportation Board in Washington, D.C., asking that Canadian National Railway be made to sell its 50% interest in the Detroit River Tunnel, which it jointly owns with CPR.

The intervention was filed as part of the process established by the STB to examine the impact of CN’s proposed acquisition of Illinois Central Corp. IC’s rail network consists of approximately 3370 route-miles of track running north-south between Chicago and the Gulf of Mexico, and east-west between Chicago and Nebraska and Iowa.

The acquisition requires approval by the STB before it can proceed.

CPR argues that CN could use its ownership position in the tunnel to block any expansion of its capacity by CPR. The tunnel is CPR’s only eastern access to the Detroit/Chicago corridor. CN uses a newer tunnel at Sarnia.

In addition, CPR indicated that it will ask the STB to require CN and IC to make available more information about their new commercial agreement with Kansas City Southern. CPR exchanges thousands of railcars annually with IC and KCS and wants to ensure that this exchange will not be compromised by the new CN/IC/KCS commercial agreement.

CPR said it was concerned the CN/IC arrangement with KCS “may be a de facto merger under another guise.”


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